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The super rich have shown that they want it all, and won’t give an inch without a fight. Next year’s elections are an opportunity to show what that fight could look like.

The American economy is about to undergo another shock. Yet this time there will be no bursting bubbles, oil crises or collapsing financial institutions to blame.

The current economic status quo—with stock markets soaring while wages remain flat and inequality widens—is both unstable and unsustainable. The coming shock will only accelerate these trends in order to benefit the wealthy, and it’s being delivered in the form of tax “reform” by a Republican Party dead set on pleasing its donor class while hanging working people out to dry.

As many economists have pointed out, at its core, the GOP’s tax bill represents a massive transfer of wealth from the bottom of society up to the top. The rich will benefit enormously, while half of all taxpayers will actually see their taxes increase over the next ten years. The top 1 percent will see a full 83 percent of the gains.

This bill isn’t just another giveaway to the wealthy elite like previous Republican tax plans: It’s a direct assault on the people who actually create the goods and offer the services that make our society run. In other words, it’s a new front in the class war.

As writer and activist Naomi Klein explains in her book The Shock Doctrine, true believers in the market-obsessed ideology of neoliberalism have long pushed for a “corporatist” economic system. “It’s main characteristics are huge transfers of public wealth to private hands,” she writes, “often accompanied by exploding debt, an ever-widening chasm between the dazzlingly rich and the disposable poor and an aggressive nationalism that justifies bottomless spending on security.”

Such is the form of shock President Trump and Republicans in Congress are attempting to inflict with their newly signed tax bill, a dream come true for the Robert Mercers and Sheldon Adelsons of the world.

Under this bill, corporations will see their taxes slashed from 35 percent to 21 percent, fulfilling a longtime Republican policy goal. Multinational companies that already evade taxation by shoring their profits overseas will be rewarded with a new tax rate as low as 8 percent—while also avoiding paying full taxes on future profits they claim to earn abroad.

Owners of certain so-called “pass-through” businesses—including private real-estate firms like the type President Trump has a stake in—will be able to take a 20 percent deduction for the income they receive from their companies. As International Business Timesreports, this giveaway could personally benefit both Republican leaders and real estate tycoons.

At a time of skyrocketing corporate profits and massively unequal growth, the same companies that have hollowed out working-class communities by shuttering factories and moving jobs abroad will make out like bandits. And the poor and middle class will pay the price.

In addition to the tax increase they’ll face down the road, low-income families also stand to lose up to $19 billion over the next decade due to changes in how inflation is calculated. The repeal of the individual mandate on health insurance will result in a 10 percent increase in premiums for those who are insured. And it will mean that 13 million Americans will most likely drop their health coverage. As a result, many of these people will forego necessary treatment, almost certainly leading to serious illness and premature death for countless Americans.

At the same time, the bill will increase the deficit by $1.4 trillion, proving yet again that Republicans don’t actually care about ballooning government costs when they serve to enrich their affluent friends and campaign contributors. In practice, this deficit-inflating tax bill is just the first step in a much broader plan to hack away at social welfare programs including Social Security, Medicare and Medicaid. Paul Ryan, Marco Rubio and other leading Republicans have already admitted as much.

Even without these additional cuts, the current bill is set to lead to a 4 percent cut to Medicare, which would prove devastating to seniors who rely on the program for their health care. The bill’s elimination of state and local tax deductions will further serve the interests of the wealthy while making working people pay more—and could cause cuts to vital public services.

The disastrous effects of this bill on working Americans will be felt for decades to come. Corporations will be able to pocket more profits while the super rich are allowed to pass on even more of their grotesque levels of wealth to their children—all without having to pay into the social compact. These heirs to opulence are the true winners in the new tax regime.

The loss of public funds, meanwhile, will be used as justification to slash the social safety net. And the rationale for the entire scheme will once again be proven a mirage.

The theory that wealth and jobs will trickle down from the top once corporations and the rich are freed from the constraints of taxation has always been a lie used to validate tax cuts at the top. It didn’t work in the 1980s under Reagan, it didn’t work in the 2000s under Bush, and it’s not going to work today under Trump.

Corporations are already sitting on record profits and still aren’t investing. The idea that if the government just lets them keep more of their money these masters of capital will suddenly change course is nonsense. Instead, the wealth gap will continue to swell, income inequality will worsen, and the grip of homegrown oligarchs over our democracy will grow ever stronger.

The effects of this shock will be deep and far-reaching. But the class war has two sides. Republicans have put their stock in a bill that is both unpopular and will hurt the very voters who make up the party’s base. Polls show that nearly two-thirds of Americans believe the bill was written to benefit corporations and the rich.

At a time when voters are embracing a populist mood, rejecting corporate influence over government and electing progressive—and openly socialist—candidates, this bill presents an opening to push for a real alternative to the shock of an entrenched corporatist system.

The super rich have shown that they want it all, and won’t give an inch without a fight. Next year’s elections are an opportunity to show what that fight could look like.

Sixty-five percent of Americans believe that corporations already pay too little in taxes, so why not demand they pay much more? And three quarters think the rich should be taxed at a higher rate, so how about running on a platform of taxing the hell out of the 1 percent? And that’s just the start of what a progressive tax agenda could look like. Candidates could demand that the government hike the inheritance tax rather than reducing it, institute a financial transaction tax and sharply increase taxes on capital gains.

What could be done with the windfall from such tax revenue? The United States could move toward making college tuition-free, initiating a Medicare for All healthcare system and fully funding broad-based social welfare programs such as food stamps and child care. These are the kind of bold, universal policy ideas that would mark a clear break with both the market fundamentalism that undergirds the GOP tax bill and the tepid means-testing approach favored by many corporate Democrats.

This kind of left economic agenda won’t come about on its own. Movements have recently taken to the streets in towns and cities across the country to voice outrage at the Republican tax plan. And the bill is already being used by Democrats to paint Republicans as out of touch and too aligned with the wealthy. But to build momentum behind a redistributive tax policy, those disgusted with the GOP’s latest legislative gambit will have to join together to demand that corporations and the rich pay far, far more.

The people who hold the most wealth and economic power in our society do so only because they are allowed to hoard their riches and profit from their investments without meaningful checks on their gluttony. No real democracy can coexist with such a system of unchecked economic power.

This tax bill is proof that the only way to upend the current system is to take the fight straight to the bank accounts of the rich—and redistribute both money and power.

Miles Kampf-Lassin, a graduate of New York University's Gallatin School in Deliberative Democracy and Globalization, is the Community Editor at In These Times. He is a Chicago based writer.
miles@inthesetimes.com
@MilesKLassin

Well I do. That statement makes no sense. While pensions and such would pay, their total payments would be much less than that of high frequency traders. Obviously, lowering taxes as an incentive has never worked and never will, so yes lets discourage high-frequency trading.

Posted by Vincent on 2017-12-29 08:09:49

False. SSI is a retirement pension system, it was not advertised as only a supplement and never intended as such. It has always been a welfare program and strengthening it is supported by the same majority that voted Hillary president.

Incidentally, also false. The chief tax dodge of the buffets of the world are shell corporations and offshoring money, the movement of which could and should be taxed to discourqage that behavior.

Posted by Vincent on 2017-12-29 08:07:47

I don't want it. Whatever you tax, you get less of. No point of throwing sand in the wheels of securities buying and selling. Even if you think taxation is for influencing social good (I believe it's to raise revenue), such a tax would get paid by 401(k) owners, pension funds, college endowments, etc. The best way to encourage longer term investing is the capital gains tax rate. In short, encourage something, don't discourage something.

Posted by Bob Fritz on 2017-12-29 06:57:52

Won't happen. SSI is not a welfare program. It is a retirement program and, from the get go, was advertised as only a SUPPLEMENT to one's own retirement savings. Changing it to a welfare program would be politically impossible, at least in the short term.

Incidentally the chief tax dodge for the Buffets of the world is to set up a huge foundation and donate most of their assets to it. The get a huge tax deduction. They get to influence social causes they like. and their heirs get permanent mobs paying millions of dollars to manage the foundation.

Posted by Bob Fritz on 2017-12-29 06:54:26

The Big Short is one of my favorite books of all time, I am glad you've read it too. I am shocked you would think ryan would want it to last longer when he clearly wants to eliminate it. I would like Social Security taxes to go up to 10% but with no employer matching, and no caps on income and all bonuses, options and capital gains counted as regular income, and inheritances down to a dollar counted as income for the inheritor. LeBron James and his (let's say) $30 million dollar a year salary, he should pay $3 million a year into the social security system. If warren buffet makes a $1billion this year, he should pay $100million into Social Security. He's still hvae $900million left over so I will cry zero tears for him. This is what needs to happen and will lift our economy and our country more than cutting social security to pay for corporate welfare.

Posted by Vincent on 2017-12-28 09:50:18

I chafe at things like 'it will never get passed'. It is simply a way to avoid admitting you don't want it to pass. I'm asking you if you would want it or not. As for computerized trading, I already know about the concept, it is given the name 'high-frequency. Personally, I'd see it banned as criminal behavior, but in this season of giving I would let it slide with merely a hefty tax for the practice. Flash Boys is great, I've read it. As for your assessment, Wall street owns the republican party and rents the democratic party, but hopefully with the defeat of clinton the democratic party could go back to representing the people and working for them. Would you like to have a party working for the people? Will you stop hiding behind a self-admitting prophecy of inevitability and decide whether or not you want to work to stop or blunt this practice? If so, you can start by not defending a person who lied to you and worked to deliver a gift to wall street that your children will be forced to pay for.

Posted by Vincent on 2017-12-28 09:39:28

The Social Security taxes have gone up and will keep going up. The benefits will go down. This is about demographics and not ideology. More of us collecting and fewer paying in. I suspect Ryan just wants to make it last longer. Anyone who introduces a bill to abolish it will be instantly through with politics.

On my first job, the Social Security Tax was about 3% and it ended in May of the year. full retirement was at age 65. Now the tax is more than twice that and, for most people, does not end during the year. The retirement age is 67.

I suspect that eventually they will remove the earnings cap and index the retirement age (for collecting full benefits) to life expectancy. In 1983, when they raised the retirement age from 65 to 67, they did so in such a way that only people younger than about 40 would be affected, thus avoiding the wrath of older voters.

If you're interested in the 2008 crash, another good book by Michael Lewis is "The Big Short," that explains how it happened. Incredibly, the government (Obama administration) gave $360,000,000 to Goldman Sachs as a bail out and didn't even require them to fire the CEO like they did at General Motors or to pay the money back.

Posted by Bob Fritz on 2017-12-27 18:01:33

It isn't my job to decide that but it will never get passed. Here's why. Modern stock trading is done automatically via computers. No guys screaming on a stock exchange floor. Matter of fact, there are about 50 stock exchanges, "dark pools." Flash traders pay to put their servers INSIDE of the dark pools. Reason? They can trade faster, by microseconds, due to the speed of light in a fiber optic cable. Lots of "fast" trading.

The flash traders are able to be intermediaries and skim off a penny or two per share as a result. Kind of unethical, but legal. they make BILLIONS of dollars doing that. Read "Flash Boys" by Michael Lewis.

The point is that there is a huge lobby that would prevent taxes on fast trades. Wall Street owns the Democratic Party and rents the Republican Party.

Posted by Bob Fritz on 2017-12-27 17:45:11

Tell you what, tone ypurself down and I'll tone myself down. As for your groups, I'm not convinced but I'm not going to argue it. You still haven't addressed intended cuts to social programs (including social securit, which ryan wants to cut and trump would totally use the fact ryan wants to to absolve himself of blame) and how those cuts will reduce both the amount of customers that patronize small businesses as well as the amount the average patron can spend. How do you adjust to that? I used to own a boiler service company, when the financial crash happened in 2008 I lost a good amount of customers and my business had to shut. This tax bill will make that happen again.

Posted by Vincent on 2017-12-27 08:36:52

Would you consider various types of taxes generally called Financial Transactions Taxes? It could be as low as ten basis points on a stock sale. Regular stockholders won't be affected too much, but high-frequency traders would be a good spurce of revenue generation plus it would blunt their excesses.

Posted by Vincent on 2017-12-27 08:31:20

This is the last time I'll respond to the F-word. Have some manners.

The two groups are not funded by "hedge fund billionaires." I don't need stats to say that. I was formerly active in one of them. Were you?

Posted by Bob Fritz on 2017-12-27 08:20:46

All reasonable points.

I think that draining the swamp is being resisted by the mosquitos and alligators who live there, many of which are Republicans, who don't WANT things to get better. As we found with ObamaCare repeal, it's easier and safer to denounce the other party than to actually do something.

Trump wanted to eliminate carried interest (which you call raising taxes on his hedge fund friends) but the lobby was too strong in Congress. Incidentally, having worked briefly in private equity (or more correctly being sentenced to work there), I definitely agree. The biggest problem with carried interest is that it encourages flipping companies every few years, as opposed to encouraging production or selling products. Each flip usually results in lost business and lost jobs.

Posted by Bob Fritz on 2017-12-27 08:18:19

I'll say whatever the fuck I want to you, kid. Those indistry groups you mentioned are funded by large hedge fud billionaires and in no way represent the opinions of small business owners nor are they in any way truthful. Let me guess, you're going to cite false stats from mercer-fu ded cambridge analytica next? You're only fooling yourself here, bob.

Posted by Vincent on 2017-12-27 07:41:39

You don't get quarterly or annual cash dividends from a 401k. You can't take money out without being taxed on all you withdraw + a 25% penalty before age 59, which means it isn't a revenue stream like dividend stocks are for regular stock holders.

Social Security can and should be saved by removing caps on taxable income and treating capital gains and stock dividends as regular income.

You still believe trump's lies? He didn't drain the swamp, he didn't raise taxes on his hedge fund friends like he said he would (he lowered them) and he's more corrupt than his obsession hillary could she be if tried. Come on bob, it's okay to admit you got played for a fool.

Posted by Vincent on 2017-12-27 07:38:32

Your father should tell you not to use profanity. As far as understanding economics, the National Federation of Independent business and the Black Chamber of commerce both endorse President Trump's new law. (NFIB is small businesses and blacks are a minority, That's diversity.) They understand economics.

You forgot to denounce President Trump's new law for allowing oil drilling in ANWAR, by the way. Lower gas prices. More winning! Yippee!

Posted by Bob Fritz on 2017-12-27 07:28:58

"Most people don't have the luxury of holding cash dividend stocks so this means nothing to them."

Actually, most people who actually work for a living have 401(k)s and/or pension funds. So it matters.

For the record, though a lot of people think Social Security will have to be cut because it is on a path to go broke in a couple fo decades, President Trump had vowed never to cut it.

Posted by Bob Fritz on 2017-12-27 07:20:32

thanks

Posted by 6384601 on 2017-12-27 04:51:45

Silly trump troll, you work hard to sound so smart. You're still an idiot and a traitor to your country. If you knew anything about economics you'd get how the dollar value drops with higher debt, and how businesses fail when consumer purchasing power drops, and how having everyone insured makes for a healthier population with lower medical costs. Lower medical costs let people buy more things, that's what helps businesses. How about ban products that weren't produced under our labor standards from being sold in our country? That'll get businesses expanding here without having to cut social security. Get your head out of your ass, troll.

Posted by Vincent on 2017-12-26 23:44:08

Nope, when the stock market broke records during the Obama administration he rarely got credit for it from you people so no changing the game now buddy. Stocks prices are high because of over- profiting. Wages are still low, healthcare and housing costs sky-high. Most people don't have the luxury of holding cash dividend stocks so this means nothing to them. Waiting for you to somehow justify cutting social security to fund corporate welfare, trump troll.

Posted by Vincent on 2017-12-26 23:35:52

Who hates Liberals? I sympathize with them because the Leftists kicked them out of the Democratic Party. And with the stock market hitting something like 72 all-time new highs in 2017 and unemployment at its lowest since 2002, it sure doesn't seem like I'm very much help to anyone who is trying to destroy America.

Posted by Bob Fritz on 2017-12-26 19:40:08

You trump nazis are inventing arguments now, bobby? Not sure what you're talking about here. Shouldn't you be busy helping trump destroy America because you hate liberals or something?

Posted by Vincent on 2017-12-26 18:57:04

Yeah...just like President Trump's rescinding of regulations and anticipation of the tax cuts have already hurt stock prices. Not!

Posted by Bob Fritz on 2017-12-26 18:51:37

Don't Progressives ever take economics courses? Where do jobs come from? The tooth fairy? Do you want American firms to keep expanding overseas or to create jobs in America?

As for all the people who will stop paying the Obamacare mandate, that's called FREEDOM OF CHOICE. Why should they pay for something they don't want? The mandate was a tax on poor people.

And...contrary to Elizabeth Warren's hysterics, the on-line simulators show that average middle-class workers will receive a $2000 tax cut.

The Progressives are just sore because it's now probable that President Trump has won reelection in 2020.

Posted by Bob Fritz on 2017-12-26 18:50:29

Yes it is good to thank God for what we have, but it is also good to fight for what is justly right for us as well. And the constant proliferation of disparity in our nation is unprecedented and so is the greed.

Posted by Philip on 2017-12-26 17:03:40

And those "capitalistic oligarchs" you are talking about here are DAMNED BY GOD ! They are not true open market capitalists, they are MONOPOLISTS, and greed shall eventually receive it's just reward: hell.

Posted by Philip on 2017-12-26 17:02:23

You said it better than I could have! Thank you. Good deal there. . . . . High Five!

Posted by Philip on 2017-12-26 16:59:47

We all know by now that this is just another GOP scheme to give more to the wealthy at the blood expense of the poor and destitute, how ever, what we need to do is to fight this bill in every way we can, even this year as well as next. We must flood our politicians with phonecalls, letters and emails telling them to REVERSE this tax bill before they DO end up killing Social Security and Medicare and Medicaid and all other CRUCIAL programs. WE all know this bill is only a great destructive scam for the rich, and WE, MUST FIGHT IT TOGETHER. WE are the people, not the one percenters.

Posted by Philip on 2017-12-26 16:58:00

Your god might have given you power. For me, I choose not to believe in the concept. I empower myself, and I refrain from falsely equating capitalism and socialism.

Posted by Vincent on 2017-12-24 13:59:13

In one way it will expose the business con, profits are gross and now the employer will have to pay workers more or look like a fool. The business schools in our colleges tell students that the union is bad and the need to out source is the golden rule. The worker is viewed as almost an afterthought which means they are not valued. The standard of living in this country has been going down for the last 20 years and NAFTA did what our college business schools wanted. The Non US owned company respects the US worker as a part of their system. This brings a more positive outlook. They do more in factory training which for US owned companies is a joke. Bring in more non US owned companies to hire US workers. The US employer may will sit on it which they have been doing or pay their workers more. Or they can pay the stockholders which they have been doing and that will really give bad pr. Trying to look at the bright side.

Posted by 6384601 on 2017-12-23 18:18:54

I am a practicing Catholic. Like the rest of us, I struggle to balance the need for distributive justice with the principles of solidarity. Neither capitalism nor socialism are paramount for social equity; they must balance each other. I have, however, through the years, gradually come to understand that the left sometimes does not understand the interwoven nature of this doctrine, but seeks to redress the (sometimes) obvious injustice done to those who are not in power by upsetting it. Historically, this has been true of all societies, and the teachings of Jesus do not advance one over the other -- only to "do justice and walk with God" (Micah 6:8).Certainly it appears that our nation has lost its way. This is because human nature, being what it is, will always seek its own benefit at the expense of others'. Turning the tables on those who have abused the power that only God can give is not the answer; we then become like the capitalistic oligarchs who have, for the most part, made a mockery of distributive justice in the name of national security and, by extension, American empire-building. I sense lip service by those in power to give token obeisance to Micah's exhortation. But we all must find what true service to others means in the broadest sense, without regard to the sometimes misleading cloak of political expediency. What the present administration has done is exemplify what we should not become: wielders of power that should be used more equitably, because it is not ours to abuse what is a gift of God for the welfare of all, not some. Somehow we have to return to that principle. Thanking God for what He has given each of us is one way to do this, especially at this time of year.

Posted by Phil Johnson on 2017-12-23 14:02:11

No one is talking about how this bill will wind up not being all that good for rich people either. The cuts to social programs that they're going to make will drive down the average individual discretionary purchasing ability. This will lead to store closures and lower profits and hurt stock prices. We need to talk more about how much people buying less things will hurt everyone.